Supply chain control

The purpose of supply chain control is to ensure that unverified products and products that are possibly illegal do not enter the supply chain. Supply chain control enables countries and companies to track timber and timber products from a forest or point of import to a point of export. Tracking means that businesses are better able to manage supply chains and that authorities can trace a product to check it is legal.

Supply chain control entails a series of mechanisms and procedures that confirms the origin of wood and wood products at each link in the chain. Logs and processed wood travel accompanied by documentation that identifies and confirms their origin.

Documents record data in a way that enables authorities to check that the quantities and types of product at any point in the supply chain are consistent with the prior and subsequent links in the chain. Supply chain control also requires procedures to prevent mixing of legally verified timber with material from unknown or unauthorised sources.

The supply chain control aspect of the timber legality assurance system must be robust, credible and firmly rooted in existing systems and procedures. This does not imply that supply chain control should be particularly hi-tech. However, supply chain control should be clear and verifiable, and should undergo testing before it is finalised.

In addition to controlling the supply of timber from a partner country, a timber legality assurance system must also be able to track other types of timber.

Imported wood. Some Voluntary Partnership Agreement (VPA) partner countries import wood from other countries, process it and then export it. A VPA partner country's timber legality assurance system must therefore be able to verify the legality of the wood it imports. The system must prevent illegally produced wood imported to the country from receiving a FLEGT licence. If imported wood is from another VPA partner country this should be relatively straightforward. If imported wood is from a non-VPA partner country, the VPA partner country will need to:

• Develop a system to verify the legality of imported timber

Or

• Segregate the wood from its own timber and ensure it does not enter the supply chain for export

Timber in transit. Timber in transit includes any timber products that originate outside a VPA partner country, which enter the VPA partner country under customs control, and leave it in the same form. Timber in transit retains its country of origin. The supply chain controls in a timber legality assurance system must be able to identify, isolate and track timber in transit to prevent it from entering a VPA partner country's supply chain and receiving a FLEGT licence from the VPA partner country. Instead, timber in transit must be accompanied at all times by proof of its country of origin.

In Indonesia, for example, gazetted Principal Customs Areas strictly exclude timber and timber products in transit. Thus, transit timber does not enter customs areas and so cannot be included in timber supply chains for FLEGT licensing.